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Unwavering demand supports rising Canadian house prices in third quarter

-Saskatoon, St. John's and Saint John report extremely strong activity-
TORONTO, Sept. 27 /CNW/ - Canada's resale housing market remained on
solid ground during the third quarter as high consumer confidence, strong
employment rates and stable interest rates led to robust buyer demand
prompting average house prices to rise in all major markets, year-over-year,
according to a House Price Survey report released today by Royal LePage Real
Estate Services.
Of the housing types surveyed, the highest average price appreciation
occurred in standard condominiums, which rose to $241,818 (+15.3%), followed
by standard two-storey properties, which rose to $407,613 (+13.4%), and
detached bungalows, which increased to $340,941 (+14.3%), year-over-year.
"Much like the Canadian dollar, the Canadian housing market is charting
its own course, quite independent from the United States and its currency and
housing climate. The strength of the Canadian dollar, and the fact that the
country is adjusting well to its value, will continue to keep interest rates
at their existing low-to-moderate levels, boding well for buyers looking to
enter the market," said Phil Soper, president and chief executive, Royal
LePage Real Estate Services. "From coast-to-coast, the country's rich
commodity markets have had tremendous impact on local economies, and there is
no indication that this will change anytime soon."
A wave of interest in Canada's natural resources including oil, gold,
uranium and wheat swept across the country, and introduced some new cities in
central and eastern Canada to the trend of significant house price
appreciations in the third quarter.
Trumping Alberta's two largest cities, Saskatoon's housing market
experienced the highest price appreciations in all housing types examined.
Vancouver, Calgary, Edmonton, Regina and Toronto also experienced double-digit
average price gains.
Added Soper: "Despite the rising house prices across the country, recent
Statscan reports cite that the home ownership rate stands at its highest on
record. With the combination of the cost of borrowing money remaining
relatively low, the availability of longer mortgage amortization periods, and
the fact that Canada's population continues to grow, it is no surprise that
more and more people are entering the real estate market."
Of note is the increasing trend of home ownership in Montreal, a city
where renting historically trumps owning. While Quebec reports the lowest rate
of home ownership in the country, the number of people buying houses is
growing; a trend likely driven by first time buyers who, in contrast to entry
buyers a decade ago, see more value in owning their own house.
While the energy rich west has reported unwavering high consumer
confidence and high employment rates for the past several years, central and
eastern Canada are now rising alongside their western counterparts as their
local commodity industries receive increased attention.
The oil sector remained a bright spot for Alberta and continued to fuel
buyer demand; however, the rate of price appreciation and the intensity of the
housing market scaled back from where it was 14 months ago.
Both Saskatoon and Regina experienced a surge in demand, as levels of
in-migration were high during the third quarter. Many native Saskatchewan
residents returned to the province from the west, seeking more affordable
housing and better work life balance.
In Central Canada, Toronto's housing market continued to set records
throughout the summer, and is poised for continued activity and rising average
house prices as the city continues to attract both buyers relocating to the
city centre from the suburbs, and newcomers to the country.
In Atlantic Canada, the past few months have seen both Saint John and
St. John's become the 'Calgarys' of the east, as several energy-related
projects in New Brunswick and Newfoundland gain attention. While Halifax is
not directly related to the oil industry, the city is experiencing a
spill-over effect as many executives are moving to the area to be in close
proximity to the oil projects.
REGIONAL SUMMARIES
The growth of the oil and gas industry in the Atlantic region has seen
many people move into Halifax resulting in an increase in sales of
standard-two storey properties in the West End, as developers build near
amenity-rich downtown. Condominiums also received a lot of attention and
continue to be popular with female buyers and first time homebuyers, who want
new homes that are move-in ready, with very little maintenance. Despite the
strong demand in Halifax, an overall balanced market prevails.
Moncton has recently been cited as the fourth best Canadian city in which
to do business. Stable interest rates, a strong economy and a rise in
in-migration have contributed to the city's high consumer confidence,
prompting a healthy, balanced market in the third quarter. The tight inventory
levels have made the market more vibrant and skew slightly in favour of the
seller. Standard detached bungalows experienced the largest price increases in
Moncton in the third quarter, as they have become a popular housing choice for
first time buyers and homeowners downsizing from standard two-storey
properties.
Fredericton's resale housing market continues to do well in the third
quarter due to strong economic fundamentals that are driving consumer
confidence. New commercial construction and the building of large chain retail
stores will continue to positively impact the future housing market. Since the
introduction of condominiums to the market four years ago, this property type
has gained in popularity.
Considered the energy hub of the east, Saint John continues to see very
strong growth in the resale housing market as a result of city development,
including a new oil refinery, a proposed $3.5M facelift to the waterfront, and
construction of a new ferry terminal. Saint John remains a seller's market,
largely due to the influx of in-migration. Many people from the western
provinces are moving to the area as they realize the booming job market and
affordable house prices can provide a great lifestyle.
In Fredericton, average house prices have experienced a slight
appreciation in the third quarter; while unit sales are up 17 per cent in
comparison to the same period in 2006. Despite brisk activity, inventory is in
good supply and is meeting the strong demand from all purchaser groups.
Charlottetown's housing market saw moderate growth in the third quarter
and is poised to increase as new business expands the job market. A new
investment management company to the city brings permanent, well-paying
positions, which is a highly anticipated change for a city that normally sees
seasonality in its job market. First time and move up buyers are dominating
market activity and investors are purchasing properties in the form of small
apartment buildings or single-family properties to rent out now and retire
into later.
In St. John's, the economy and consumer confidence are high, due to
positive outlooks in business and industry within the province. The government
announced new initiatives with Hebron Ben Nevis and Husky with an expected
$22B in revenue to come into the province. Property prices are increasing and
demand is outpacing supply, despite the fact that listings are up over this
time last year.
The combination of a robust economy, limited inventory and unwavering
demand stimulated real estate activity in Montreal and led to a moderate rise
in average house prices. Recent corporate expansion plans made by companies
such as Bombardier have led to a rise in employment levels and continued to
further strengthen the economy; ultimately instilling a high consumer
confidence.
Ottawa's resale housing market maintained its strength in the third
quarter from the first half of the year as average house prices experienced
steady increases and a rise in unit sales. Affordable interest rates and
inflation rates that remain in check contributed to Ottawa's ever-expanding
condominium market. Demand from first-time buyers and baby boomers led to a
rise in condominium sales, with the former group purchasing their first homes
and the latter buying investment properties.
Toronto's resale housing market continued to blaze trails in the third
quarter with record-breaking activity levels and average house price
increases, driven primarily by a surge in buyers in the city. As one of the
world's leading cities, Toronto's housing market is made up of a host of
buyers. The traditional homebuyer, typically a married couple, family or
single person, has morphed over the last few years. Today's buyer pool has now
grown to include friends or even colleagues buying a property together as an
affordable means to building equity, while satisfying their living needs.
Despite the tight market in the city's core, Toronto's and the surrounding
area's market is moving toward more balanced conditions.
In Winnipeg a shortage of inventory coupled with unwavering demand led to
a healthier and stronger than expected resale housing market in the third
quarter. Demand for housing in Winnipeg experienced tremendous growth as
buyers from Alberta flocked east after cashing in on their home sales and
purchasers from Vancouver, the Unites States and Europe looked for investment
opportunities similar to what Calgary produced a year before. Insatiable
demand has prompted over half of the listed homes to sell for asking price or
more.
Saskatoon held the title of the country's city with the highest average
price appreciation during the third quarter, with prices rising dramatically.
Strong demand is holding the market in the seller's favour, and despite a
slight increase in inventory, there are no signs indicating a shift in the
market's condition any time soon. Regina's resale housing market remained
vibrant through the third quarter as unprecedented buyer demand continued, and
was unable to be satiated by existing inventory levels.
Average house prices in Calgary continued to experience double-digit
gains in the third quarter. While the rate of appreciation has tempered from
the pace that characterized Calgary's housing landscape one year ago, the
market remains healthy. The past few months have seen a broadening of the
inner city perimeter, and new emphasis placed on areas that were previously
considered less desirable and too far from the city's core. The combination of
the expansion to such areas, with the lingering effects of a seasonal summer
slowdown in activity has led to a spike in inventory levels.
Energy-rich Edmonton continued to attract buyers to the resale housing
market leading to double-digit price appreciations. An increase in inventory
has been more than able to satiate buyer demand. Two-storey properties have
seen an increase in sales from this period last year thanks to more generous
living spaces that are driving move-up buyers to shift from smaller bungalow
properties. The condominium market continues to grow in popularity amongst
first time buyers and baby boomers.
Stronger than expected summer real estate activity characterized
Vancouver and Victoria's resale housing markets, prompting prices to rise
significantly during the third quarter. With the high levels of in-migration
that Vancouver experiences, demand for homes in all price ranges and in all
parts of the city remains high, while inventory levels remain the same as last
year. A strong economy, low unemployment rates and high consumer confidence
contributed to the strength of Victoria's housing market.
Survey of Canadian Average House Prices in the Third Quarter 2007
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Detached Bungalow Standard Two Storey
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Q3 2007 Q3 2006 Bungalow Q3 2007 Q3 2006 2 Storey
Market Average Average % Change Average Average % Change
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Halifax 198,000 186,333 6.3% 238,333 191,667 24.3%
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Charlottetown 150,000 145,000 3.4% 177,000 175,000 1.1%
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Moncton 157,000 135,000 16.3% 135,000 129,000 4.7%
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Fredericton 155,000 141,200 9.8% 197,000 155,200 26.9%
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Saint John 189,000 141,200 33.9% 240,000 155,200 54.6%
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St. John's 153,667 143,667 7.0% 213,333 200,667 6.3%
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Atlantic 167,111 148,733 12.4% 200,111 167,789 19.3%
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Montreal 225,214 213,691 5.4% 334,813 321,141 4.3%
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Ottawa 305,750 290,083 5.4% 302,917 285,667 6.0%
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Toronto 405,581 378,641 7.1% 523,320 479,477 9.1%
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Winnipeg 204,950 181,579 12.9% 231,833 202,337 14.6%
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Regina 208,000 145,500 43.0% 185,500 158,000 17.4%
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Saskatoon 293,750 183,250 60.3% 323,750 199,650 62.2%
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Calgary 472,522 395,067 19.6% 476,711 405,778 17.5%
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Edmonton 370,000 286,857 29.0% 397,857 316,429 25.7%
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Vancouver 787,500 704,250 11.8% 879,000 794,000 10.7%
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Victoria 400,000 375,000 6.7% 440,000 403,000 9.2%
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National 340,941 298,368 14.3% 407,613 359,464 13.4%
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Standard Condominium
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Q3 2007 Q3 2006 Condo %
Market Average Average Change
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Halifax 150,000 142,000 5.6%
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Charlottetown 100,000 98,000 2.0%
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Moncton
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Fredericton 130,000 126,500 2.8%
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Saint John 129,000 117,600 9.7%
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St. John's 160,000 146,333 9.3%
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Atlantic 133,800 126,087 6.1%
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Montreal 201,991 193,190 4.6%
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Ottawa 193,750 181,083 7.0%
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Toronto 287,039 254,422 12.8%
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Winnipeg 120,032 105,648 13.6%
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Regina 131,500 94,500 39.2%
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Saskatoon 207,500 118,000 75.8%
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Calgary 293,167 245,844 19.2%
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Edmonton 266,667 200,433 33.0%
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Vancouver 419,750 366,250 14.6%
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Victoria 270,000 229,000 17.9%
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National 241,818 209,075 15.7%
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Average house prices are based on an average of all sub-markets examined
in the area, except for the smaller markets of Charlottetown, Moncton,
Fredericton, Saint John and Victoria.
The Royal LePage Survey of Canadian House Prices is the largest, most
comprehensive study of its kind in Canada, with information on seven types of
housing in over 250 neighbourhoods from coast to coast. This release
references an abbreviated version of the survey, which highlights house price
trends for the three most common types of housing in Canada in 80 communities
across the country. A complete database of past and present surveys is
available on the Royal LePage Web site at www.royallepage.ca, and current
figures will be updated following the end of the third quarter. A printable
version of the third quarter 2007 survey will be available online on
November 15, 2007.
Housing values in the Royal LePage Survey are Royal LePage opinions of
fair market value in each location, based on local data and market knowledge
provided by Royal LePage residential real estate experts. Historical data is
available for some areas back to the early 1970s.
About Royal LePage
Royal LePage is Canada's leading provider of franchise services to
residential real estate brokerages, with a network of over 13,000 agents and
sales representatives in 600 locations across Canada operating under the Royal
LePage, Johnston and Daniel, and Realty World brand names. Royal LePage
manages the Royal LePage Franchise Services Fund, a TSX listed income trust,
trading under the symbol "RSF.UN". For more information visit
www.royallepage.ca.

For further information:

For further information: For the regional market highlights or to
contact a spokesperson, please contact: Tiffany Fisher or Sarah Daly,
Mansfield Communications Inc., Phone: (416) 599-0024, or E-mail:
tiffany@mcipr.com or sarahd@mcipr.com